Trust Distribution Resolution Template

Updated 18 September 2026

By Mike Wilczynski, Chartered Accountant

A trust distribution resolution is the trustee's written decision, made on or before 30 June, naming which beneficiaries are presently entitled to the trust's income for the year and in what shares. Without it the trustee is taxed on the income at 47%. The minute is the written record of that resolution, and this generator produces both in one document.

How to use this generator

1. Enter the trust, the trustee and the date of the resolution, which must be on or before 30 June.
2. Add each beneficiary and their share as a percentage, a fixed dollar amount or the balance.
3. Stream franked dividends or capital gains to a named beneficiary if the deed allows it.
4. Create the minute, read the warnings, then download it as Word or save it as a PDF and sign it.

Build your trust distribution resolution

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The 30 June deadline is the whole game

A discretionary trust's beneficiaries are taxed on the trust's income only if they are presently entitled to it at the end of the income year. Present entitlement comes from the trustee exercising its discretion, and the trustee exercises it by making a resolution. So the resolution has to exist by 30 June. Not the accounts, not the tax return, the resolution.

If there is no valid resolution, the deed's default clause decides who is entitled, and if the deed has no default beneficiary the trustee is assessed on the lot under section 99A at 47%. That is the outcome the generator above is built to prevent, which is why it will not let you date the minute after year end.

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Why the minute must deal with 100% of the income

The figures are never final on 30 June. Depreciation, accruals, the accountant's year-end adjustments and sometimes an amended assessment all move the number. A minute that distributes "$50,000 to Anna and $30,000 to Mike" only works if the income turns out to be exactly $80,000. Anything above it is undistributed and taxed to the trustee at 47%.

The fix is a balance beneficiary: one person or entity who takes whatever is left after the fixed amounts and percentages. The generator insists on it whenever you use fixed amounts, and the wording it produces applies the shares to the income "as finally determined", so a later adjustment does not undo the resolution.

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Minute, resolution or distribution statement?

People search for a trust distribution minute, a trustee resolution and a trust distribution statement and mean much the same document. The resolution is the decision. The minute is the written record of it. Where the trustee is a company, the directors pass the resolution and the minute records it; where the trustee is one or two individuals, they simply sign the resolution. The generator produces the minute in either form.

A distribution statement is different. It is the schedule in the trust tax return (the Statement of Distribution) showing each beneficiary's share of net income, franking credits and capital gains. Your accountant prepares it from the minute, which is why the minute has to be clear about streaming.

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Streaming franked dividends and capital gains

Streaming lets the trustee send franked dividends, with their credits, to one beneficiary and capital gains, with the 50% discount, to another. It only works if the deed permits it and the minute makes the beneficiary specifically entitled to that class of income.

The timing differs. A specific entitlement to a franked distribution must be recorded in the trust's records by 30 June under section 207-58. A specific entitlement to a capital gain can be recorded up to 31 August under section 115-228, which is the only extension the trust rules give you. The generator adds the calendar entry when you stream a gain.

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Family trust elections and franking credits

Without a family trust election, a discretionary trust generally fails the 45-day holding period rule and the franking credits on its dividends do not reach the beneficiaries. The election fixes that, at the price of family trust distribution tax at 47% on anything distributed outside the family group. It should be a deliberate choice, and the minute should not assume it exists. The generator asks, and warns if you are streaming franked dividends without one.

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Company beneficiaries after Bendel

Distributing to a bucket company caps the tax at the company rate. What happens to the entitlement afterwards is where groups come unstuck. For sixteen years the ATO treated an unpaid entitlement as a Division 7A loan; on 10 June 2026 the High Court in Commissioner of Taxation v Bendel held that a company simply not calling for payment is not a loan, and the ATO accepted that later that month.

That does not make an unpaid entitlement free. If the trust passes the money on to a shareholder of the company or their family, Subdivision EA taxes it in the year the money moved, and section 100A is still there for arrangements where the entitled beneficiary is not the one who benefits. Pay the entitlement, or decide deliberately not to, and model the Division 7A and section 100A positions before 30 June rather than after.

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Distributing to children

Trust income to a beneficiary under 18 is taxed under Division 6AA at penalty rates: nothing on the first $416, 66% on the next $891, and 45% on the whole amount once it passes $1,307. A small distribution that uses the $416 is fine. Larger ones are rarely worth it, and the money has to be genuinely applied for the child's benefit, which "paid to the parents' mortgage" is not. The generator flags any beneficiary you mark as under 18.

Provisions referenced: present entitlement by 30 June; trustee assessment under section 99A at 47%; specific entitlement to franked distributions by 30 June under section 207-58; specific entitlement to capital gains by 31 August under section 115-228; Division 6AA; family trust distribution tax at 47%. Verified 18 September 2026. The generator produces a draft for your accountant or solicitor to settle against the trust deed.

Trust distribution FAQ

When must a trust distribution resolution be made?

By 30 June of the income year it relates to, or earlier if the deed says so. The resolution creates present entitlement, and present entitlement has to exist at year end. Signing in July for the year that closed in June does not work, and dating it earlier than it was signed is a much bigger problem than the tax.

What is a trustee resolution document?

It is the written record of a decision the trustee has made under the deed. The distribution resolution is the one made every year by 30 June, but trustees also resolve to change banking arrangements, accept a new beneficiary or vary the deed. The generator above produces the annual distribution resolution in minute form for a company trustee or as a signed resolution for individual trustees.

What are the minutes of a trust?

A written record of a decision made by the trustee. For a discretionary trust the annual distribution minute records how the trustee has exercised its discretion over that year's income: which beneficiaries take what share, and whether any franked distributions or capital gains are being directed to particular beneficiaries.

What happens if we distribute less than 100%?

The undistributed part is income to which no beneficiary is presently entitled and the trustee is assessed on it at 47% under section 99A. Naming a balance beneficiary who takes the remainder is the standard way to remove that risk, and it costs nothing to include.

Can the resolution use fixed dollar amounts?

Yes, as long as someone takes the balance. Fixed amounts are common where a beneficiary is meant to receive exactly enough to use a tax-free threshold or a lower bracket. Without a balance beneficiary the amounts have to add up to the final income exactly, which they never do.

How many days do we have to distribute trust income?

None after year end for the resolution itself, which must be made by 30 June. The one genuine extension is for capital gains: a specific entitlement to a capital gain can be recorded by 31 August, two months after year end, under section 115-228. Franked distributions do not get that extension.

Can we distribute to a company?

Yes, if the deed allows it. The complication is what happens to the entitlement afterwards. An unpaid present entitlement left with the company raises Subdivision EA and section 100A questions, and the Bendel decision changed the Division 7A part of that landscape without removing the need to deal with it deliberately.

Do we need a family trust election to pass on franking credits?

Usually yes. Without one, a discretionary trust generally fails the holding period rules and the credits do not reach the beneficiaries. The trade-off is family trust distribution tax at 47% on anything distributed outside the family group, so the election should be made deliberately rather than as a default.

General information only, prepared without regard to your objectives, financial situation or needs. It is not legal, financial product or taxation advice and should not be relied on as such. Documents generated here are drafts to be settled against the trust deed by your adviser. Liability limited by a scheme approved under Professional Standards Legislation.